How Do Humans Make Choices?

Pekka Korhonen and Jyrki Wallenius
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Jyrki Wallenius: Aalto University School of Business

Chapter Chapter 4 in Making Better Decisions, 2020, pp 21-30 from Springer

Abstract: Abstract Humans have been making decisions for tens of thousands of years. Over the years they have developed different ‘ways’ of making decisions. Scholars have developed theories to model human decision-making based on each ‘way’ of making decisions. In this chapter we discuss the pros and cons of several commonly used ways of making decisions. They have been found useful, although they also have their limitations. We discuss the satisficing approach and contrast it with the optimizing approach, the lexicographic model, the compensatory models, ‘Elimination By Aspects’-model, and prospect theory.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isochp:978-3-030-49459-9_4

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DOI: 10.1007/978-3-030-49459-9_4

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